Tags: Blackstone | Brixmor | REIT | IPO

Blackstone's Brixmor Raises $825 Million in REIT IPO

Tuesday, 29 Oct 2013 07:23 PM

Brixmor Property Group Inc., the second-largest U.S. shopping-center landlord, raised $825 million in its initial public offering, the first of several property-company IPOs anticipated from Blackstone Group LP.

Brixmor sold 41.25 million shares for $20 each, according a company statement Tuesday, after offering 37.5 million for $19 to $21. Proceeds will be used mainly to repay about $628.5 million under a credit line maturing in 2017, according to a regulatory filing by the New York-based real estate investment trust.

Brixmor is the second-largest U.S. real estate IPO this year, the busiest for property offerings since 2004, data compiled by Bloomberg show. The economic recovery, falling commercial-property vacancies and low interest rates have primed the pump for public offerings, with REIT stocks at close to six- year highs. That’s enabling Blackstone to pursue share sales to reduce debt at companies acquired near the market peak in 2007 or after the financial crisis.

“It is a good outcome for Blackstone,” said Cedrik Lachance, managing director at Green Street Advisors Inc., a real estate research firm. “The upsize is good news as it gives the company a little more money” to pay down debt. Lachance said the pricing was in line with his estimate of fair value for the shares.

Brixmor’s IPO is the biggest IPO by a retail REIT since Simon Property Group Inc., the world’s biggest owner of shopping malls, raised $840 million in 1993, data compiled by Bloomberg show. The shares will start trading Wednesday, listed on the New York Stock Exchange under the symbol BRX.

Centro Purchase

Blackstone formed Brixmor in 2011, after purchasing shopping centers from Australia’s debt-laden Centro Properties Group for about $9 billion. The New York-based firm later sold some of the properties and added others acquired from Equity One Inc. and Regency Centers Corp. Brixmor has 522 centers, the most in the U.S. after New Hyde Park, New York-based Kimco Realty Corp.

“The pipeline for realizations is really growing,” Blackstone Chairman and Chief Executive Officer Stephen Schwarzman said Oct. 17 on the private-equity firm’s third- quarter earnings call.

Blackstone, the world’s largest manager of alternative assets, also has filed for IPOs of hotel chains Extended Stay America Inc. and Hilton Worldwide Holdings Corp., which probably will take place later this year. Investors expect IPOs next year of the firm’s U.S. warehouse business, IndCor Properties Inc., and its house-rental company Invitation Homes.

Before Brixmor’s offering, real estate IPOs raised $3.9 billion this year, compared with $3 billion in all of 2012, according to data compiled by Bloomberg. The total was $7 billion in 2004, when 29 property companies went public, the data show.

Biggest IPOs

Empire State Realty Trust Inc., the New York-based owner of Manhattan’s Empire State Building, completed 2013’s largest real estate IPO, raising $1.07 billion this month, according to data compiled by Bloomberg. American Homes 4 Rent, a housing landlord based in Malibu, California, raised $811.8 million in July. Both totals include overallotment options.

Brixmor sold almost 14 percent of the company in the IPO after the exchange of all outstanding unit shares, according to data compiled by Bloomberg. That implies a market value of about $6 billion.

Brixmor planned to sell all the shares in the IPO, according to the original terms of the prospectus. Blackstone will own about 73 percent of the common shares after the IPO and Centerbridge Partners LP will own 8.3 percent, the prospectus shows.

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Brixmor Property Group Inc., the second-largest U.S. shopping-center landlord, raised $825 million in its initial public offering, the first of several property-company IPOs anticipated from Blackstone Group LP.
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2013-23-29
Tuesday, 29 Oct 2013 07:23 PM
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